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CalPERS commits $500m to Blackstone Partners VII

The California pension fund had allocated $16.6bn to buyouts as of 30 June.

The California Public Employees’ Retirement System committed $500 million to Blackstone Capital Partners VII in May, as well as $60 million to Blackstone Tactical Opportunities Fund, according to its monthly update for June. The pension fund also committed €87.5 million to Wigmore Street Co-investment Fund.

Blackstone ranks as CalPERS’ third biggest general partner relationship by exposure, according to the pension fund’s chief investment officer performance report. As of 30 June, CalPERS had committed $2.14 billion, or 7.5 percent of its PE allocation, to Blackstone. Carlyle ranked first, at $2.43 billion, or 8.5 percent, and Apollo second, at $2.38 billion, or 8.4 percent.

Over a 10-year period Carlyle returned 15.35 percent to CalPERS’ PE portfolio. Apollo returned 16.29 percent and Blackstone 13.44 percent, according to the same report. The report also shows the top 20 GPs by exposure account for over two-thirds of CalPERS’ PE allocation of $29 billion.

Private equity comprised 9.6 percent of its total portfolio of $301.9 billion, just short of its 10 percent target set in May 2014.

CalPERS has invested heavily in buyouts, allocating $16.64 billion, or 58.5 percent of its total PE allocation. The next biggest PE strategy was growth expansion, to which CalPERS committed $4.8 billion, or 16.9 percent.

The reports were published ahead of investment committee meetings on 17 and 18 August.

For the fiscal year-to-date, CalPERS’ private equity portfolio produced a net return of 8.9 percent, compared with 7.2 percent from the prior month. Its 10-year and 20-year net returns from private equity significantly outperformed other assets, at 11.9 percent and 12.3 percent, respectively.

Earlier this year CalPERS announced its plans to cull relationships with fund managers by half and subsequently to allocate more capital to a smaller number of funds. Last month it announced it will begin reporting its carried interest fees, after having previously admitted it does not keep track of them.

The Blackstone Capital Partners VII fund also received investments from Florida State Board of Administration, Oregon Public Employees’ Retirement System, State of Wisconsin Investment Board, Teacher Retirement System of Texas, among many others, according to data from PEI’s Research & Analytics Division.